American Pipe Tolling Does Not Require Precognition

Hildebrandt v. Staples the Office Store LLC, No. B294642 (D2d3 Dec. 4, 2020)

The trial court granted summary judgment on the statute of limitations in this wage and hour case. Plaintiff argued that two prior class actions in which class cert was ultimately denied tolled the statute under the American Pipe doctrine. The trial court disagreed, finding that because class cert was denied on commonality grounds, Plaintiff had no reasonable basis to wait to file sue in reliance on the prior cases.

That’s not really the test, though. So long as Plaintiff can ascertain that she falls within the prior class definition, and so long as she’s bringing more or less the same claims, American Pipe applies. The Court of Appeal addresses Jolly v. Eli Lilly & Co., 44 Cal. 3d 1103 (1988), in which the California Supreme Court generally adopted the American Pipe analysis, while deciding that it didn’t apply to the facts of that case, which was a mass tort. In particular, Jolly held that tolling didn’t apply in because: (a) the class definition was somewhat fail-safe, such that a Plaintiff could not know she was a class member without first having key liability issues decided in her favor; and (b) the class plaintiff did not bring damages claims, which were the crux of Plaintiff’s case. In those circumstances, a plaintiff can’t reasonably rely on the prior class action in deferring her decision to sue. 

But those weren’t the case here. Plaintiff fell within the general class definition and had basically the same claims. Defendant says the exceptions in Jolly nonetheless apply because Plaintiff could not have predicted that her claims were sufficiently common with the named class plaintiffs to know she was in a certifiable class in the prior case. But requiring a predictive exercise like that is contrary to the whole point of American Pipe and Jolly, which is to preserve the utility of the class action device by not requiring any and all potential class members to rush to the courthouse to avoid the limitations period. 

In reaching its result, the court disagreed with Batze v. Safeway, Inc., 10 Cal. App. 5th 440 (2017), which suggested a presumption against tolling when class cert in the prior case is denied on lack commonality. 

Reversed.

Tolling Statute Violates Dormant Commerce

Arrow Highway Steel, Inc. v. Dubin, No. B303289 (D2d2 Oct. 29, 2020)

Plaintiffs here have a super-old judgment that they never bothered to renew under Code of Civil Procedure § 683.110, 683.120. But they argue that the ten-year limit on time to bring a collections action in § 337.5, should be tolled under § 351, which tolls limitations while the defendant is not present in California. Defendants, however, argue that § 351 is unconstitutional under the dormant commerce clause. The trial court agreed, and so does the Court of Appeal.

Generally, there are three tests that determine whether a state law violates the commerce clause: (1) laws that purposefully discriminate against out of state persons; (2) laws that do so in “practical effect”; and (3) laws that, while not necessarily discriminatory, burden interstate commerce to an extent that can’t be justified by their utility. Nobody here is arguing that § 351 is a (1) or a (2). That is, § 351 applies equally to toll the statute when a Californian leaves as it does when a Nevadan comes here to commit a tort and then leaves the state. So the issue is the balancing test.

Which is not the clearest of tests in the con law casebook. Applying both U.S. Supreme Court and California state precedent, the Court of Appeal holds that § 351 subjects defendants to an unreasonable burden of having to choose between remaining present in California to permit the statute to run and being out of state to conduct their affairs, including interstate commerce. That is particular so given the minimal need for tolling in an era where out of state defendants are readily subject to long arm jurisdiction and out of state service of process.

Affirmed.

JCCP Coordination Submission Tolls Three- and Five-Year Rules

Fid. Nat’l Home Warranty Co. Cases, No. D074161 (D4d1 Mar. 20, 2020)

This is an appeal of a pair of cases that were dismissed under the five- and three-year rules in Code of Civil Procedure §§ 583.310 and 583.320. 

There’s a threshold issue regarding the timeliness of the notice of appeal. The trial court entered an order dismissing the cases on December 15, 2017. But it did not enter judgments until March 7 and April 2, 2018. Plaintiffs filed a consolidated notice of appeal on May 1. There’s no question that the appeal is timely if the March 7 and April 2 judgments are the only final appealable judgments in the case. See Cal. R. Ct. 8.104(a)(1)(can file notice of appeal, at minimum, 60 days from entry of judgment). But if the December 15 dismissal order is itself a judgment, then the appeals are too late.

It all comes down to the interplay between Code of Civil Procedure §§ 581d and 581(k). Section 581d says an order dismissing a case needs to be signed by the court and filed in the action. When the order takes that form, it constitutes a final judgment. But § 581(k) says a certified class action can’t be dismissed unless and until notice approved by the court has been given to the class and the court orders a dismissal. Here, that issue wasn’t raised until after the entry of the December 15 order. The Court ultimately approved the form of notice in one case and found that notice was unnecessary in the second case because no class had been certified. 

Until the notice issues were resolved, § 581(k) prohibited the cases from being dismissed. Thus, the Court of Appeal holds that the December 15 order cannot be treated as a final judgment under the authority of § 581d. Only an order issued after the § 581(k) prerequisite had been satisfied, and which conformed to formalities in § 581d could count as a final judgment. That being the case, the judgments entered on March 7 and April 2 were the real judgments in the cases, and thus the appeals were timely taken.

On the merits, the cases were put on ice for 135 days while a coordination judge decided whether cases should be rolled into a coordinated JCCP action. A plaintiff is entitled to tolling of the 3 and 5 year limits when it is impossible, impracticable, or futile” to bring a case to trial. § 583.340(c). And the Rules of Court pertaining to JCCP proceedings specifically say that a trial can’t be commenced with the coordination motion is pending. Cal. R. Ct. 3.515(i). Thus, notwithstanding a split of authority on the question, the court finds that plaintiffs were entitled to another 135 days of tolling and that the trial court abused its discretion in failing to count it. 

That helps one case but not the other. One case was subject § 583.310’s five-year rule. The 135 days of tolling was enough to take that case out of the statute. So that’s reversed. 

But in the other case, there had been a prior reversal on appeal. So that case was subject to § 583.320’s three-years post remand rule. The 135 days of tolling was not enough to get that case within the three years. And the trial court didn’t abuse its discretion in declining to permit tolling based on other impracticalities in getting to trial claimed by plaintiffs, such as budgetary constraints, plaintiff’s claims of diligent prosecution, or defendant’s purported delays in complying with discovery. So that’s affirmed.

Reversed in part.

California Agrees: Only One Hit on the American Pipe

Montoya v. Ford Motor Co., No. G045752 (D4d3 Mar. 12, 2020)

In 2018’s China Agritech v. Resh, the U.S. Supreme Court held that so-called American Pipe tolling tolls a class member’s statute of limitations only for the time a first filed class action remains pending. An absent plaintiff can’t stack together tolling periods from a bunch of different class actions to achieve an even longer tolling period. So once the first class action is dismissed, class cert denied, or the plaintiff opts out of a certified or settlement class, the plaintiff’s clock restarts without further tolling.

Here, the Court of Appeal adopts the rationale China Agritech as a matter of California state procedural law.

Reversed.

Some Deck Clearing

These are a handful of very old opinions that were just lingering untouched in the bottom of my queue. Briefly . . .

* * *

Zakk v. Diesel, No. B284432 (D2d4 Mar. 24, 2019)

Supposed oral contract to pay a producer for movie sequels when he only worked on the original. Demurrers get sustained with leave over and over again. In his Third Amended Complaint, Plaintiff tweaks his theory to go from an overarching agreement to agree to compensation for the sequels, to more clearly explaining separate agreements from each film. The trial court said that was a sham, but the Court of Appeal disagrees. While there was certainly some refinement in the theory, the contract setup in the TAC was not completely inconsistent with that alleged in the three prior versions of the complaint, so the sham pleading rule didn’t apply.

Reversed.

* * *

JPMorgan Chase Bank, N.A. v Ward, No. D073378 (D4d1 Mar. 28, 2019)

When it rains it pours. Another sham pleading case. The doctrine generally prevents a party from saving a pleading by withdrawing a crucial allegation in a later amendment. Here, between versions of a complaint, the plaintiff got new counsel and proposes to amend to withdraw an allegation of mistake in order to switch legal theories to bring a claim based on the enforcement of a an agreement as written. But the sham amendment rule is predicated on the integrity of factual allegations, not legal theories. Presumably, parties can do better legal research and refine their theories in amending a complaint. So since the allegation was largely a legal conclusion and the premise of the withdraw is largely a change of legal theories, the rule does not apply.

Reversed.

* * *

Long v. Forty Niners Football Co., LLC, No. A142818 (D1d4 as modified Apr. 8, 2019)

Plaintiff filed a state case against the Forty Niners for getting shot in the parking lot at Candlestick Park. He then filed an identical federal case claiming diversity based on the conversion of the ’Niners from a California LP to a Delaware LLC. When the ’Niners suggested that Colorado River abstention merited staying the federal case in favor of the state, plaintiff dismissed the state case. But then the federal court later dismissed the federal case for lack of subject matter jurisdiction. (A Delaware LLC is not necessarily a citizen of Delaware.) Plaintiff then filed another state court case. By then, the statute had run on most of Plaintiff's claims.

Plaintiff claims tolling, but the superior court, and now the Court of Appeal, say no. This isn’t a case where Plaintiff made a good faith mistake about subject matter jurisdiction and then litigated for years in federal court, only for the jurisdictional defect to be belatedly recognized. His first state court case was jurisdictionally fine. There was no need to file the federal case, so equitable tolling does not apply. As the Court explains:

The doctrine of equitable tolling was not intended to burden a defendant or the courts with having to repeatedly re-start litigation of a case that was almost fully adjudicated, simply because the plaintiff had a last-minute change of mind about the forum.

Reversed.

* * *

Zakaryan v. The Men’s Warehouse, Inc., No. B289192 (D2d2 Mar. 28, 2019)

This case addresses a split of authority between Larson—which held that you can’t split off part of a PAGA claim to arbitration and litigate the rest—and Esparza—which said the part of the claim that seeks unpaid wages, which go to the plaintiff and not to the DFEH, can be hived off and sent to arbitration. The Court here sides (mostly) with Larson, albeit for a slightly different reason. As the Court sees it (contrary to both Larson and Esparza) explained, the upaid wages are actually part of the PAGA penalty which would be paid to the government, along with a per week statutory fine. Since all of those claims are brought on a quasi qui tam basis, there’s no basis to split the claim and sent part if it to arbitration.

Affirmed.

Class Action Tolls Only Individual Claims

Fierro v. Landry’s Restaurant, No. D071904A (D4d1, Feb. 15, 2019)

When this case was first decided last year, I noted that the opinion seemed sideways with the U.S. Supreme Court’s very recent decision in China Agritech. That case held that although under the so-called American Pipe doctrine, a pending class action tolls the statute of limitations for class members’ individual claims, but it does not do so for other class actions. The California Supreme Court granted review and transferred the case back to the 4/1, ordering it to reconsider in light of China Agritech. 

Post-transfer, the Court of Appeal agrees that the rule in China Agritech should also be adopted as a matter of California state class action procedure. So no tolling for the prior class action. The Court, however still can’t tell what’s time barred from the face of the complaint, so it remands for the trial court to deal with that issue. 

In getting there, the Court decides an alternative issue. Apparently, the prior class action was dismissed after a class was certified for failure to bring it to trial within five years under Code of Civil Procedure §§ 583.310 and 583.360. Defendant claims that the current class claims are barred from the res judicata effect of that dismissal. But they aren’t. A dismissal under the five-year rule is not with prejudice and thus not preclusive. Practically, since five years is longer than most statutes of limitations, a plaintiff dismissed under the five-year rule won’t be able to refile. But it is nonetheless theoretically possible, particularly if some post-filing tolling like American Pipe is in the mix.

Reversed.

Tolling Accrues to the Diligent

Martinez v. Landry’s Restaurants, No. B278513 (D2d7 Aug. 28, 2018)

This wage and hour class action, filed in 2007, got dismissed under the five-year rule in Code of Civil Procedure § 583.310. Plaintiffs don’t argue that five years haven’t passed. But there’s potential tolling for four different periods. 

Too Many Hits on the American Pipe

Fierro v. Landry’s Restaurant Inc., No. D071904 (D4d1 May 14, 2018)

Plaintiff brings a wage an hour class action against his employer. But a prior class action with identical claims had apparently been previously dismissed for failure to bring the case timely to trial under the five-year rule in Code of Civil Procedure §§ 583.310 and 583.360. The trial court granted a demurrer to the class claims on that basis. It did, however, permit plaintiff’s individual claims to proceed because statute of limitations issues raised by Defendant weren’t evident from the face of the complaint. Plaintiff took an appeal under the death knell doctrine.

Can’t Wait for the Perfect When the 5-Year Rule Looms

Tanguilig v. Nieman Marcus Grp., No. A141383 (D1d4 Apr. 16, 2018)

Under Code of Civil Procedure § 583.310, a case must be dismissed with prejudice if it has not been brought to trial within five years of filing. The five years is subject to various kinds of tolling. Plaintiff in this case—a wage-and-hour class action combined with some PAGA claims that was filed in 2007—needs three different kinds of tolling to get within the five year window. 

Her key tolling argument here comes under § 583.340(c), which stops the clock during periods where it is “impossible, impracticable, or futile” to bring the case to trial. That section permits tolling due to circumstances, beyond the plaintiff’s control, that prevent her from expeditiously bringing her case to trial. 

Unlike most of Defendant’s employees, Plaintiff quit instead of signing an employment contract containing an arbitration clause with a class action waiver. That caused some typicality issues for her class action. So several years into the case, Plaintiff added an additional class rep who had signed the agreement. But that solution led to bigger problems. It resulted in the trial court compelling a significant part the new rep's case to mandatory non-class arbitration. Notably, almost a year later, the trial court reconsidered its stay and ultimately lifted it. (The reconsideration was ultimately affirmed on appeal almost three years ago.)

Now, Plaintiff seeks tolling under § 583.340(c) for the period in which the stay was in effect. But none of the stuff with the new rep prevented Plaintiff from proceeding to trial on her own (smaller) part of the class, which wasn’t stayed. The fact that Plaintiff preferred to go to trial with a bigger, better class didn’t mean that going to trial was “impossible, impracticable, or futile” under § 538.340(c).

Affirmed.

Ninety Days of Tolling

Selvidge v. Tang, No. C083427 (D3 Mar. 5, 2018)

Under Code of Civil Procedure § 340.5, the statute of limitations for med-mal is one year or three years after discovery of the injury. The patient in this case died, so it’s a one year clock. Plaintiff—patient’s next of kin—sued almost three months after the year and run, so she’s too late under § 340.5.

Pretrial Detention Statute of Limitations Blues

Austin v. Medicis, No. B277546 (D2d3 Mar. 21, 2018)

Code of Civil Procedure § 352.1 provides for tolling of a statute of limitations for up to two years if, at the time the claim accrued, the plaintiff is “imprisoned on a criminal charge . . . for a term less than life.” The Court here reads that to toll the SOL for inmates serving sentences to state prison, but not to a pretrial detainee in a county jail.

Affirmed.

For Whom the Cross-Claim Tolls

ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd., No. H040776 (as modified Nov. 30, 2016)

This case deals with an interesting issue on the statute of limitations. To what cross-claims does the relation-back doctrine apply to toll a limitations period? Does it only apply to compulsory cross-claims, or to permissive ones too?

A Good Reason to Address Class Cert Early

Falk v. Children’s Hospital L.A., No. B251182 (D2d3 Jun 24, 2015)

This case is about so-called American Pipe tolling. See Am. Pipe & Const. Co., v. v. Utah, 414 U.S. 538 (1974). It was developed under federal law, but generally applies in California as well. The gist of the doctrine is that a plaintiff who is within the class definition in a pending class action can rely on that action in deferring to bring her own suit. The statute of limitations on her claims gets tolled during that period. The whole point is to deter every potential class member from feeling like they need to jump in to preserve their rights, which would defeat the whole point of the class action procedure.

Soon to Be an Episode of CSI ...

Arroyo v. Plosay, No. B245659 (D2d4 Apr. 2, 2014)

The court of appeal holds that the statute of limitations does not bar claims based on a factual theory that the plaintiff did not uncover until he hired an expert witness. This was the case even though plaintiff was aware of the factual basis for claims on an entirely different theory, for which the statute had run.

Majority Affords No Tolling for Minority

Barker v. Garza, No. B237916 (D2d8 Aug. 22, 2013) 

In a split decision, the court of appeal holds that tolling of a statute of limitations due to the plaintiff’s minority status under Code of Civil Procedure § 352(a) does not apply to claims brought under the Drug Dealer Liability Act. In reaching that result it suggests a broad interpretive rule that the dissent finds particularly problematic.